Apple’s long-awaited iRadio may be close to officially launching, as reports indicate Cupertino is “close” to clinching a deal with two major record companies to stream their respective tracks.
According to CNET, the arrangement is somewhat more lucrative for the labels than existing rates paid by Pandora. Indeed, while Apple’s alleged deal will offer cheaper per-stream rates, it also includes additional sources of (potential) income for record labels.
To be sure, industry sources believe Cupertino plans to exploit its installed iTunes user base to accelerate revenue for record companies participating in the “iRadio” initiative.
For example, one potential method would offers subscribers an easy way to buy a song they hear on the music streaming service. Another option? Cutting labels in on a revenue sharing arrangement based on audio ads.
As AppleInsider’s Mikey Campbell notes, while “iRadio” have circulated for months, this time around industry sources believe Warner Music and Universal Music Group could clinch a deal with Apple by next week.
Nevertheless, a number of sources caution that the current arrangement between Cupertino and the labels is fragile and could ultimately disintegrate.
“The only thing concrete in contract is the per-play rate,” explained one source. “If you end up having no ad revenue, that’s still zero. And we won’t know what the buying habits will be. Will people streaming still take the time to buy from iTunes?”